Trade Deficit Widens, but It's Not All Bad News

Trade Deficit Widens, but It's Not All Bad News

Article excerpt

The nation continues to look for concrete evidence of rebound, and the latest trade releases have many panning for gold among the numbers. The U.S. Census Bureau released that wholesale merchant sales totaled $313.1 billion for June 2009, down 21% from June 2008. Nonetheless, it was a modest increase of 0.4% over the May 2009 numbers, while sales of automotive and automotive parts were up 4.5%. Also showing signs of improvement were petroleum and petroleum products, which were up 7.1% from May.

Despite a sluggish domestic economy the last several quarters, the United States has been able to maintain positive growth with gaining momentum in foreign markets. After seeing the smallest trade gap this decade, the U.S. trade deficit widened 4% from $26 billion in May to $27 billion in June, and though both imports and exports increased in June by 2%, imports outpaced exports by $1.1 billion.

In June, exports of goods and services rose to $125.8 billion while imports of goods and services ticked upwards to $152.8 billion.

In total, the goods and services deficit has decreased $33.2 billion from the heights seen in June 2008. A snapback from the rebound of the dollar as the rest of the world has grappled with economic woes is that exports are down a little more than 22% year-over-year, a loss of $35.8 billion. Adding more pressure to foreign markets is the U.S. battle with recession, with imports tanking $69 billion from June 2008, representing a decline of 31%.

For the six-month period from January to June, total U.S. exports year-to-date stood at $745.8 billion while total U.S. imports were at $918.8 billion. In 2008, during the same six months, U.S. exports reached $924.4 billion while imports approached $1.3 trillion. The good news for U.S. trade is that imports have declined at a more rapid pace than exports--28.8% compared to 19. …